Recurring Findings

Health Care: Recurring Significant Internal Control Deficiencies

Federal Program

Issue

First Year Reported

Department's Assertion

Page Number

Medicaid Cluster

During our audits for fiscal years 2011–12 and 2012–13, we reported that Health Care Services did not have adequate policies and procedures in place to monitor subrecipients in accordance with federal requirements. In fiscal year 2013–14, we found Health Care Services implemented some corrective action but continues to lack adequate policies and procedures to monitor subrecipients. Health Care Services provides services under the Medicaid program through various subrecipients. For example, monies are passed through to counties, or local government agencies, which are responsible for certain eligibility determinations and other administrative activities. Funds are also passed through to local education consortiums and other nonprofit organizations for reimbursement of expenditures for Medicaid programs and administrative costs. Health Care Services disbursed $1.9 billion to subrecipients for county and school-based administrative activities in fiscal year 2013–14. Health Care Services monitors its subrecipients through various mechanisms. For example, Health Care Services policy requires that a site visit be conducted for each county or local government agency once every four years and once every three years for school-based organizations. Our audit found the following: • Health Care Services does not have policies and procedures in place to ensure that DUNS numbers are obtained from its subrecipients prior to awarding of federal funds. Failure to obtain DUNS numbers increases the risk that subrecipients may spend federal funds for unallowable purposes and incorrectly reporting subawards. • In April 2011, Health Care Services implemented travel restrictions and analysts were unable to perform all planned site visits. The school-based unit performs desk reviews when they are unable
to travel which are equivalent in scope to a site visit. However, we identified 15 of the 28 local government agencies or local education consortiums that are part of the school-based program had no site visitor desk review performed within the last three years. Lack of adequate monitoring increases the risk that Medicaid funds may not be spent for an allowable purpose. • Health Care Services does not have policies and procedures in place to obtain OMB Circular A-133 audit reports from local education consortiums and nonprofit organizations. As a result, Health Care Services does not determine whether appropriate and timely corrective action has been taken with respect to Medicaid findings.

2011-12

1. The Department agrees with the finding and is working with our contractors to finalize a process to obtain DUNS numbers from contractors and sub-recipients. A Policy and Procedure Letter (PPL) will be issued to all contractors advising of the requirement. 2. The Department agrees with the finding and is currently reviewing site visit requirements to include new implementation plans and is expected to begin site visits spring 2015. 3. In conjunction with Item #1 - the Department agrees with the finding and is finalizing a process to collect the expenditures of federal funds passed through to sub-recipients. This new process will be disseminated in the PPL issued in Item #1.

During our audits for fiscal years 2011–12 and 2012–13, we reported that Health Care Services did not have adequate policies and procedures in place to monitor subrecipients in accordance with federal requirements. In fiscal year 2013–14, we found Health Care Services implemented some corrective action but continues to lack adequate policies and procedures to monitor subrecipients. Health Care Services provides services under the Medicaid program through various subrecipients. For example, monies are passed through to counties, or local government agencies, which are responsible for certain eligibility determinations and other administrative activities. Funds are also passed through to local education consortiums and other nonprofit organizations for reimbursement of expenditures for Medicaid programs and administrative costs. Health Care Services disbursed $1.9 billion to subrecipients for county and school-based administrative activities in fiscal year 2013–14. Health Care Services monitors its subrecipients through various mechanisms. For example, Health Care Services policy requires that a site visit be conducted for each county or local government agency once every four years and once every three years for school-based organizations. Our audit found the following: • Health Care Services does not have policies and procedures in place to ensure that DUNS numbers are obtained from its subrecipients prior to awarding of federal funds. Failure to obtain DUNS numbers increases the risk that subrecipients may spend federal funds for unallowable purposes and incorrectly reporting subawards. • In April 2011, Health Care Services implemented travel restrictions and analysts were unable to perform all planned site visits. The school-based unit performs desk reviews when they are unable
to travel which are equivalent in scope to a site visit. However, we identified 15 of the 28 local government agencies or local education consortiums that are part of the school-based program had no site visitor desk review performed within the last three years. Lack of adequate monitoring increases the risk that Medicaid funds may not be spent for an allowable purpose. • Health Care Services does not have policies and procedures in place to obtain OMB Circular A-133 audit reports from local education consortiums and nonprofit organizations. As a result, Health Care Services does not determine whether appropriate and timely corrective action has been taken with respect to Medicaid findings.

2011-12

1. The Department agrees with the finding and is working with our contractors to finalize a process to obtain DUNS numbers from contractors and sub-recipients. A Policy and Procedure Letter (PPL) will be issued to all contractors advising of the requirement. 2. The Department agrees with the finding and is currently reviewing site visit requirements to include new implementation plans and is expected to begin site visits spring 2015. 3. In conjunction with Item #1 - the Department agrees with the finding and is finalizing a process to collect the expenditures of federal funds passed through to sub-recipients. This new process will be disseminated in the PPL issued in Item #1.

During our audits for fiscal years 2011–12 and 2012–13, we reported that Health Care Services did not have adequate policies and procedures in place to monitor subrecipients in accordance with federal requirements. In fiscal year 2013–14, we found Health Care Services implemented some corrective action but continues to lack adequate policies and procedures to monitor subrecipients. Health Care Services provides services under the Medicaid program through various subrecipients. For example, monies are passed through to counties, or local government agencies, which are responsible for certain eligibility determinations and other administrative activities. Funds are also passed through to local education consortiums and other nonprofit organizations for reimbursement of expenditures for Medicaid programs and administrative costs. Health Care Services disbursed $1.9 billion to subrecipients for county and school-based administrative activities in fiscal year 2013–14. Health Care Services monitors its subrecipients through various mechanisms. For example, Health Care Services policy requires that a site visit be conducted for each county or local government agency once every four years and once every three years for school-based organizations. Our audit found the following: • Health Care Services does not have policies and procedures in place to ensure that DUNS numbers are obtained from its subrecipients prior to awarding of federal funds. Failure to obtain DUNS numbers increases the risk that subrecipients may spend federal funds for unallowable purposes and incorrectly reporting subawards. • In April 2011, Health Care Services implemented travel restrictions and analysts were unable to perform all planned site visits. The school-based unit performs desk reviews when they are unable
to travel which are equivalent in scope to a site visit. However, we identified 15 of the 28 local government agencies or local education consortiums that are part of the school-based program had no site visitor desk review performed within the last three years. Lack of adequate monitoring increases the risk that Medicaid funds may not be spent for an allowable purpose. • Health Care Services does not have policies and procedures in place to obtain OMB Circular A-133 audit reports from local education consortiums and nonprofit organizations. As a result, Health Care Services does not determine whether appropriate and timely corrective action has been taken with respect to Medicaid findings.

2011-12

1. The Department agrees with the finding and is working with our contractors to finalize a process to obtain DUNS numbers from contractors and sub-recipients. A Policy and Procedure Letter (PPL) will be issued to all contractors advising of the requirement. 2. The Department agrees with the finding and is currently reviewing site visit requirements to include new implementation plans and is expected to begin site visits spring 2015. 3. In conjunction with Item #1 - the Department agrees with the finding and is finalizing a process to collect the expenditures of federal funds passed through to sub-recipients. This new process will be disseminated in the PPL issued in Item #1.